EXEC U T IV E S U MM A RY
THE U.S. TRUST ® STUDY OF THE PHILANTHROPIC CONVERSATION
Understanding advisor approaches and client expectations
Conducted in partnership with The Philanthropic Initiative
OVERVIEW
The vast majority of high net worth (HNW) individuals give to charity, and many feel that philanthropy is an important
aspect of their wealth experience. HNW individuals are increasingly relying on professional advisors for support with
their charitable activity.1 However, the philanthropic conversations with and advice provided by their advisors are not
always aligned to their needs. Several disconnects between HNW individuals and advisors center on the initiation and
substance of their philanthropic discussions. Such discussions can play an important role in an individual’s or family’s
wealth experience and have implications for their wealth planning and management. These conversations can also help
advisors deepen relationships and grow their businesses by connecting with clients on something truly meaningful to them.
KEY FINDINGS
The study found that most advisors (88%) believe these discussions
are important to have with their clients — with many (46%) considering
them to be very important. In keeping with these findings, the study
also found that most advisors (89%) discuss philanthropy with clients
to some degree, and 71% make it their regular practice to ask clients
about their interest in charitable giving. Perhaps because advisors deem
the philanthropic conversation to be so important, 54% will revisit the
subject even if their clients initially appear to be disinterested in
discussing their charitable activity.
Professional advisors and the HNW clients they serve are in disagreement
about the frequency of these discussions and who initiates them. Contrary
to the fact that most advisors (89%) say that they discuss philanthropy
with at least some of their clients, only 55% of HNW individuals say they
discuss philanthropy with a professional advisor — with an additional
13% open to such discussions. Most HNW individuals (90%) say they do
discuss charitable giving with someone, if not their advisor — often a
spouse or partner (84%), other family members (48%) or friends (37%),
or with a nonprofit organization to which they give (33%).
One-third of advisors (33%) say they are the one to initiate these
discussions with their clients, and that clients initiate them just 20% of
the time. However, among HNW individuals who report having discussed
philanthropy with an advisor (55%), half (51%) say that they are typically
the one to initiate the conversation, and that their advisor brings up the
subject on their own just 17% of the time.
Who Initiates the Philanthropic Conversation?
Depends on Who You Ask
(Percentage of Responses)
THE PHILANTHROPIC CONVERSATION:
LOOK WHO’S TALKING
60%
40%
30%
20%
Are Not Bank Guaranteed
Please see back for important disclosure information.
33%
20%
17%
10%
0%
HNW individual initiates the
conversation
HNW Individuals’ Responses
Advisor initiates the
conversation
Advisors’ Responses
What matters more to HNW individuals than who initiates the
philanthropic conversation is that it be had in a meaningful way early in
the relationship. Advisors indicate that they are more likely to bring up
the subject of philanthropy once they have greater knowledge of a client’s
personal (40%) or financial goals (47%), or when they are aware that a
client volunteers or is active in the community (43%). However, fully
one-third (34%) of HNW individuals feel the topic should be raised during
their very first meeting, and virtually all (90%) agree that this discussion
should occur within the first several meetings with their advisor.
Investment products:
Are Not FDIC Insured
51%
50%
May Lose Value
THE U. S. TRUST STUDY OF THE PHIL ANTHROPIC CONVERSATION | E XE C U T IVE SU MMARY
Among advisors who discuss philanthropy with their HNW clients, nearly
all (91%) encourage their clients to give to charity, with 41% of advisors
doing so regardless of a client’s asset level. However, half (50%) of
advisors prefer to wait until a client has accumulated at least $500,000
in liquid assets before encouraging charitable giving, and one-quarter
(24%) place the starting point at $3 million or more.
Approximately half of advisors (48%) discuss their own charitable giving
with their clients, which the study found to be a good idea. Many HNW
individuals (34%) — whether they discuss philanthropy with an advisor
or not — say that they would be more open to discussing charitable
giving, or would perceive the value of philanthropic advice from an
advisor to be greater (43%), if they were aware of the advisor’s own
philanthropic engagement.
CLIENTS SEEK VALUES-BASED CONVERSATIONS:
DEEPENING THE DISCUSSION
Less than half of HNW individuals (47%) feel that professional advisors
are good at discussing personal or charitable goals with them. This
feeling doesn’t improve all that much even among individuals actually
discussing philanthropy with an advisor, with just 63% finding their
advisor to be proficient at rendering philanthropic advice.
This may be one of the reasons why less than half of HNW individuals
(41%) are fully satisfied with these conversations. Another reason may
be that twice as many advisors (71%) say that they raise the philanthropic
discussion from a technical perspective — focusing on tax considerations
or wealth structuring, for example — compared to those who do so
beginning with their clients’ philanthropic goals or passions (35%).
Once initiated, 41% of advisors say their further philanthropic discussions
also center on technical issues, compared to 38% who tend to focus
more on their clients’ charitable goals. HNW individuals report otherwise,
with nearly two-thirds (63%) finding that ensuing discussions with their
advisor about charitable giving tend to center on the more technical
issues, while just 27% indicate that these discussions center on their
charitable goals, values and interests.
This may be one of the reasons why less than half of HNW individuals
Focus
of Philanthropic
Discussions
(41%)
are fully
satisfied with these
conversations. Another reason
More
Technical
Issues
than
Personal
Goals
may be that twice as many advisors (71%)
say that they raise the
philanthropic discussion from a technical perspective — focusing on
tax considerations or wealth structuring, for example — compared
to those who do so beginning with their clients’ philanthropic
63% goals or
Technical
passions
(35%). Issues
41%
Once initiated, 41% of advisors say their further philanthropic discussions
also center on technical issues, compared to 38% who tend to focus
more on
their clients’
charitable goals. HNW
27% individuals report otherwise,
Charitable
Goals,
with
nearly
two-thirds
(63%)
finding
that
ensuing discussions with their
Values and Interests
38%
advisor about charitable giving tend to center on the more technical
issues, while just 27% indicate that these discussions center on their
20%
40%
60%
80%
charitable goals, values 0%
and interests.
(Percentage of Responses)
Advisors’ Responses
HNW Individuals’ Responses
2
Despite this disconnect, many individuals (73%) who discuss philanthropy
with an advisor still believe such conversations are important, and the
vast majority (82%) still feel that their advisor plays an important, if not
very important (33%), role in their charitable giving.
WHY PEOPLE GIVE AND WHY THEY DON’T:
KNOWING WHAT MATTERS MOST TO CLIENTS
The top three reasons why advisors believe their HNW clients engage
in charitable giving are consistent with the top motivations reported by
HNW individuals themselves, which are: being passionate about a cause,
having a strong desire to give back, and having a positive impact on
society and the world. After that, however, reasons provided by HNW
individuals and advisors differ significantly:
• The next three most cited reasons by HNW individuals were:
to encourage charitable giving by the next generation (30%), religious
or spiritual motivations (23%), and because they believe giving back
is an obligation of wealth (22%). Meanwhile, advisors believed their
clients’ next most popular motivations would include: reducing their
tax burden (46%), religious or spiritual reasons (41%), and creating a
family legacy (30%). The study found that, in fact, just 10% of HNW
individuals cite reducing taxes among their motivations for giving.
• Further evidence of a disconnect on the topic of taxes was found when
advisors cited a belief that 40% of HNW individuals would reduce their
giving if the estate tax were eliminated, and that 78% would do so if
income tax deductions for donations were eliminated — whereas just
6% and 45% of HNW individuals, respectively, indicated that they would
reduce their charitable giving if these tax policy changes occurred.
Tax Benefits as a Motivation for Giving
Less Important than Advisors Think
HNW individuals would reduce
their giving if income tax
deductions were eliminated
HNW individuals would reduce
their giving if estate tax were
eliminated
Motivation for giving is reducing
tax burden
45%
78%
6%
40%
10%
46%
0% 20% 40% 60% 80% 100%
(Percentage of Responses)
HNW Individuals’ Responses
Advisors’ Responses
The reasons advisors and HNW individuals cite for why HNW individuals
don’t give or hesitate to give to charity differ even more starkly:
• Advisors are under the misimpression that the top reasons HNW
individuals may shy away from giving are that they won’t have enough
money to leave to their heirs (41%), they won’t be left with enough THE U. S. TRUST STUDY OF THE PHIL ANTHROPIC CONVERSATION | E XE CU TI VE S U M M A RY
oney for themselves (34%), and they don’t consider themselves
m
wealthy enough to give (22%). To the contrary, HNW individuals cite
a concern that their gift won’t be used wisely by a nonprofit recipient
(30%), their lack of knowledge about or connection to a charity (24%),
and fear of increased donation requests from others (17%).
Inhibiting Factors of HNW Giving
Advisor Perceptions Not Always on the Mark
40%
30%
HNW Individuals’ Responses
24%
20%
17%
10%
0%
The study found that a mere 14% of advisors are likely to raise the topic
of philanthropy with clients (who have children) for the purpose of
helping to instill charitable values among the next generation. Affirming
this, just 9% of HNW individuals report that their advisor has suggested
involving children and grandchildren in such discussions. Yet nearly half
(45%) of HNW individuals feel it is important to involve children and
grandchildren in discussions with their advisor about charitable giving.
VALUABLE KNOWLEDGE
My gi will
not be used
wisely
Lack of
knowledge/
connection
to charity
Fear of
increased
donation
requests
from others
Reasons for Why Advisors
Believe HNW Individuals Don’t Give
50%
40%
One-third (32%) of HNW individuals indicate that discussions with their
advisor about philanthropy have included advice about giving vehicles
and/or help in setting one up. And, among individuals who discuss
philanthropy with an advisor, 84% feel confident that their advisor is
knowledgeable about these vehicles.
ENGAGING THE NEXT GENERATION
Reasons for Why HNW Individuals Don’t Give
30%
structured giving vehicles when making donations to charitable
organizations — while such vehicles are used by just 12% of individuals
who don’t discuss philanthropy with an advisor.
41%
Advisors’ Responses
34%
30%
22%
20%
Nearly one-third of HNW individuals (31%) indicate that they would be
more likely to choose an advisor who is knowledgeable about charitable
giving. More than half of advisors (57%) plan to increase their knowledge
about philanthropy and to better their ability to advise clients about
charitable giving.
• Among advisors interested in becoming more proficient at rendering
philanthropic advice, the areas they would most like to learn about are:
developing a strategic giving plan (55%); understanding more about
giving vehicles (50%); becoming better at integrating a client’s
philanthropic values and goals into an overarching wealth management
plan (46%); engaging the next generation in giving (45%); and the role
that impact investing (or Socially Responsible Investing) plays in their
clients’ philanthropic pursuits (38%).
10%
0%
Hot Topics
Would not
have enough
money to
leave heirs
Would not be
le with
enough money
for themselves
Client does
not consider
himself/herself
wealthy enough
to give
What Advisors Want to Learn About Philanthropy
How to help a client develop a strategic
giving plan and mission formation
55%
Understanding more about
giving vehicles
UTILIZATION OF GIVING VEHICLES
According to our additional research, the 2012 Bank of America Study of
High Net Worth Philanthropy,1 the majority of wealthy donors (71%) give
strategically, and have a plan for their giving versus merely responding
to requests for donations. This strategic focus has resulted in more HNW
donors utilizing structured giving vehicles — such as donor-advised funds,
private/family foundations and charitable trusts — to help achieve their
philanthropic goals.
Our current study on advisors found that the use of giving vehicles
is correlated with more advisor involvement — among HNW individuals
who discuss philanthropy with an advisor, 47% use one or more
50%
Integrating client philanthropic values/
goals into overarching wealth mgmt. plan
46%
How to engage the next generation
in giving
45%
Understanding the role that social
impact investing (or SRI) plays in my
clients’ philanthropic pursuits
0%
38%
20%
40%
60%
(Percent of Advisor Responses)
3
THE U. S. TRUST STUDY OF THE PHIL ANTHROPIC CONVERSATION | E XE C U T IVE SU MMARY
GOOD FOR CLIENTS, GOOD FOR BUSINESS
CONCLUDING THOUGHTS
Three out of four (74%) advisors say that discussing philanthropy with
clients is good for their business for a variety of reasons, including that
it: presents a more comprehensive and holistic approach to managing
a client’s wealth (24%); demonstrates greater interest in their clients’
charitable goals and aspirations (18%); shows clients that they are
interested in more than just their clients’ money (13%); and provides
insights that help advisors better serve their clients (13%).
The philanthropic conversation between professional advisors and their
clients is important to have early and often. And while these discussions
may be happening, they are falling short of their potential. HNW individuals
are looking to advisors to help them fulfill their philanthropic missions,
involve the next generation, and leave a legacy. They are also seeking more
values-based discussions with advisors about their philanthropy — conversations that go beyond tax considerations and include life goals,
values and passions — so that they can achieve their philanthropic
ambitions for themselves, their families and their communities.
Many advisors (75%) find discussing philanthropy with clients to be an
excellent way to deepen relationships and establish new relationships
(54%). Many HNW individuals (40%) agree that discussing philanthropy
with an advisor has, in fact, deepened their relationship.
More than half of advisors (56%) have also found that discussing
philanthropy with clients has helped them build relationships with
members of the client’s extended family — this proved most true
among wealth/financial advisors (64%).
LEARN MORE
To download the full U.S. Trust Study of the Philanthropic Conversation,
please visit ustrust.com/philanthropy
To learn more about the solutions offered through U.S. Trust and
Institutional Investments & Philanthropic Solutions, please contact
your advisor.
ABOUT U.S. TRUST ® INSTITUTIONAL INVESTMENTS & PHILANTHROPIC SOLUTIONS
U.S. Trust, Bank of America Corporation is dedicated to the philanthropic and nonprofit communities. Through U.S. Trust Institutional Investments
& Philanthropic Solutions, we put our strengths and resources behind every mission — be it a nonprofit organization or a philanthropic individual
or family. We provide specialized advisory, administrative and investment solutions to both nonprofit organizations and private philanthropic
clients that help transform their charitable goals into meaningful action. We tailor mission-focused solutions and offer ongoing advice and
guidance through a close working relationship with a dedicated advisor, helping organizations and individuals turn missions into milestones.
ABOUT THE PHILANTHROPIC INITIATIVE (TPI)
The Philanthropic Initiative (TPI) is an innovative philanthropic consulting firm that helps corporations, foundations and families develop and execute
customized strategies to increase the impact of their giving. Working nationally and globally, TPI helps donors achieve philanthropy that is more
strategic, effective and fulfilling, and helps professional advisors build the capacity to do the same with their own clients. For nearly 25 years, TPI has
directed more than a billion in philanthropic dollars and influenced billions of dollars more.
ABOUT THE STUDY
To better understand the extent and dynamics of philanthropic conversations taking place between wealthy individuals and their advisors,
U.S. Trust partnered with TPI in August 2013 on a study of advisors’ approaches to and HNW clients’ expectations of these discussions.
The research revisited the key points uncovered in an earlier study undertaken by TPI in 1999 and expanded upon topics of particular interest today
from two vantage points: advisors to high net worth (HNW) clients and HNW consumers who are active in philanthropy. The overall themes of this
research project are: To broadly determine the level of advisor interest in actively promoting philanthropy, as well as understand how advisors are
talking to their HNW clients about philanthropy, and to understand consumer giving behavior, knowledge about formal giving methods, and how they feel
about philanthropic planning with professional advisors.
The study included an online survey of a random sample of more than 300 advisors — including wealth advisors, trust and estate attorneys,
accountants and other tax professionals — and a random sample of 120 HNW individuals with $3 million or more in investable assets who are
actively engaged in charitable giving. The study was conducted by Phoenix Marketing International, an independent market research firm, on behalf
of U.S. Trust and TPI, with all data tested for statistical significance at the 95% confidence level.
2012 Bank of America Study of High Net Worth Philanthropy research series. (http://www.ustrust.com/ust/pages/philanthropy.aspx)
Institutional Investments & Philanthropic Solutions (II&PS) is part of U.S. Trust, Bank of America Corporation (U.S. Trust). U.S. Trust operates through Bank of America, N.A. and other
subsidiaries of Bank of America Corporation (BofA Corp.). Bank of America, N.A., member FDIC. Banking and fiduciary activities are performed by wholly owned banking affiliates of BofA Corp.,
including Bank of America, N.A. Brokerage services may be performed by wholly owned brokerage affiliates of BofA Corp., including Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S).
Certain U.S. Trust associates are registered representatives with MLPF&S and may assist you with investment products and services provided through MLPF&S and other nonbank
investment affiliates. MLPF&S is a registered broker-dealer, registered investment adviser, member SIPC and a wholly owned subsidiary of BofA Corp.
MLPF&S and Bank of America, N.A. make available investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. or in which BofA Corp.
has a substantial economic interest.
© 2015 Bank of America Corporation. All rights reserved. | ARS8G5GB | SHEET-04-15-0734 | 00-21-4097NSB | 05/2015
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